Human Capital: Your Greatest Resource

RISKWISE

To move to the next plateau of management, you have to learn how to bring the right people to the right place at the right time — with the right set of skills, doing the right things. Easier said than done, but good risk management dictates that we spend more time in this area.

Managing people also represents the greatest opportunity to improve your bottom line. You can leverage your time and talent if you manage your “human capital” with as much focus and attention as you manage your financial capital.

It helps to look at managing human capital much as you would manage a sports team.

Consequently, I have put together the Big Eight of human capital management. Even though the Big 12 is better than ever with the addition of the four Texas teams, those of us in the western Corn Belt do have fond memories of that once-glorious sports entity, the Big Eight.

In this and subsequent issues, I will address eight rules of human capital management. The first two are:

Winning Teams Have Better Players.

Successful farmers spend time and money to find the right talent for their operations. They don't just fill a position with a body.

Often, we try to find the lowest-cost labor and it ends up costing more in the long run. Turnover can cost up to 70% of the annual salary of an employee in down time, lost productivity during the replacement process, additional training costs and confusion on the team by switching players.

One of my clients made the point that “people are just like corn hybrids. If you put one in the wrong place you have a mess.”

Just putting an ad in the paper may not yield the best results. Networking with other producers to find where they hired top people is an effective tool.

Asking current employees for names of potential candidates is one of the most effective resources you can use. Your current employees will suggest people they like and get along with. That makes it a lot easier when new employees need to blend into your team, causing less stress on everyone. Current employees also know the job requirements and can do a good job of matching the person with the job.

Winning Teams Hire Smarter People.

Unconsciously, we often hire people who have less talent than we do. Big mistake.

Make every effort to hire someone smarter than you are. How do you tell? You don't have to give an IQ test. Grades are a clue, but an in-depth interview can give you a good idea if you're consciously trying to assess this area as you research a candidate's background.

If a potential employee has the talent to some day do all you can, great. That can only free you up to do what you're good at and what you like doing.